Use the world labels to fill the blanks and complete the sentences below. Not all of the words will be used, but all the blanks should be filled. Assume the world has only the U.S. and Japan, and that trade between them is balanced such that neither run a trade deficit not surplus. If exchange rate now changes such that U.S. dollar becomes cheaper for Japanese to buy (and all else remains the same), we would expect: U.S. exports to Japan will_____(1)_____, and U.S. imports from Japan will___(2)____. These changes in trade will cause net exports in the U.S. to___(3)______. The U.S. would begin to run a trade____(4)_____ and experience a net capital____(5)_______. U.S. savings will be_____(6)_____ domestic investment. Increase decrease Greater than less than Surplus deficit Outflow inflow Not change equal to